The transitional period is set to last from 29 March, 2019 to December 2020, and is intended to smooth the path to a future permanent relationship.

Barnier said there was also an agreement on the rights of 4.5m EU citizens in the UK and the 1.2m UK citizens in the EU after Brexit, including giving EU citizens arriving in the UK during the transition the same rights and guarantees as those who arrive before Brexit.

The proposed deal will include an emergency “backstop” option to avoid a hard border that would allow Northern Ireland to stay in the single market and the customs union – a move which Theresa May had opposed.

The UK will also be able to negotiate and sign trade deals during the transition period.

Both the UK and the EU hope the terms of an agreement on the transitional period can be signed off by Theresa May’s fellow leaders at the EU summit this week.

Barnier said the new draft legal text marks a “decisive step” but added that it was “not the end of the road”.

Davis said the move provided further certainty for businesses and included safeguards for fishing quotas during the transition period.

“We must seize the moment and carry on the momentum of the last few weeks,” he said.

“The deal today should give us confidence that a good deal for the UK and EU is closer than ever before.”

Donatus Anichukwueze is a journalism graduate from the Lagos State University, School of Communication. He's a writer with special interest in technology, sports, entertainment and politics. He's also a true and true Chelsea FC fan.